Plateau State Governor Raises Concerns Over Inflation and Naira Depreciation’s Impact on Federal Allocation
Caleb Muftwang, the Plateau State Governor, has expressed concerns about the impact of inflation and the depreciating naira on the real value of the monthly federal allocation to state governments. Despite the increased amount of federal allocation, Muftwang argues that its purchasing power has significantly diminished.
In an interview with Channels Television’s Sunrise Daily, Muftwang emphasized the importance of considering the purchasing power of the federal allocation rather than just the amount received. He pointed out that the rising costs of essential materials like diesel, cement, and iron rods used in infrastructure projects are eroding the value of the allocation.
The governor further illustrated the economic challenge by comparing the exchange rate over time. He noted that when the last administration took office in 2015, the dollar exchanged for approximately N180 to the naira. Today, the value of the naira has decreased, making it more challenging for state governments to effectively utilize the allocated funds.
President Bola Tinubu’s administration has implemented reforms, including the removal of petrol subsidy and the floating of the naira, which have resulted in state and local governments receiving the highest allocations in the nation’s history from the federation account. However, Muftwang’s concerns highlight the need for a more nuanced understanding of the economic challenges facing state governments.
Muftwang’s remarks serve as a timely reminder of the complexities involved in managing state finances and the need for a comprehensive approach to address the challenges posed by inflation and naira depreciation.
